Glencore Studying Raising Stake in Congo Mine With Gertler

Updated on
  • Swiss firm owns 69% of Mutanda; Gertler’s Fleurette owns rest
  • Mutanda was the biggest copper producer in Congo in 2015

Glencore Plc, the commodities trader and miner headed by billionaire Ivan Glasenberg, is considering increasing its stake in the Mutanda copper mine in the Democratic Republic of Congo.

The Swiss firm, which already owns 69 percent of the mine, will make a further announcement if appropriate, it said in a statement Thursday, without elaborating. Israeli billionaire Dan Gertler’s Fleurette Group owns the rest of Mutanda. A spokesman for Fleurette Group declined to comment.

Mutanda copper mine

Photographer: Simon Dawson/Bloomberg

Glencore last year completed a debt reduction program, reducing borrowings by about $10 billion through a combination of asset sales, reduced spending and the suspension of its dividend. Last month, emerging from the self-imposed era of austerity, it agreed a surprise $11 billion deal with Rosneft PJSC, of which it’s commitment was 300 million euros, giving it a stake in the Russian oil producer and a new off-take accord.

The $1.8 billion Mutanda project is central to Glencore’s global copper expansion plan. Glencore and Gertler began investing in mines at Mutanda and neighboring Katanga almost a decade ago. In 2015, Mutanda produced more than any other copper mine in the Congo, Africa’s biggest miner of the metal.

In September, Glencore said it was reviewing allegations by U.S. authorities regarding the bribery of officials in the African country said to implicate Gertler.

Some of the Israeli businessman’s projects in Congo were funded by Och-Ziff Capital Management Group LLC, which in September agreed to pay more than $400 million to settle a U.S. investigation into allegations of bribery violations in Africa.

Och-Ziff Agreement

Och-Ziff’s partner in Congo paid $100 million in bribes to government officials over a 10-year period to win access to mining assets, according to an agreement between Och-Ziff and the U.S. Justice Department. That partner was Gertler, a person with knowledge of the matter, who asked not to be identified because it’s private, said last year.

Gertler has consistently denied paying bribes. He hasn’t been charged with an offense and wasn’t mentioned by name in either the settlement with the Securities and Exchange Commission or those with the Justice Department. None of the allegations pertain to the Mutanda mine.

Glencore’s African copper assets, which also include the Mopani operations in Zambia, recorded revenue of $3 billion in 2015, according to the company’s annual report.

The stock was little changed at 290.95 pence by 9:56 a.m. in London, valuing the company at $52 billion. Glencore shares tripled last year, making it the second-best performer on the U.K.’s benchmark FTSE 100 Index. Rival Anglo American Plc was the top performer, almost quadrupling.

Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.

— With assistance by Thomas Biesheuvel

(Updates with shares in 10th paragraph.)
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